Lecture 11 Flashcards

Question

Advantages of Coupons

Answer 1

Appeal to Price Sensitive Consumer Can Offer Price Break Without Retailers Coop Can Be Effective Way to Induce Trial of New or Existing Products Can Be Way to Defend Market Share and Encourage Repurchase

Answer 2

Difficult to Determine How Many Consumers Will Use Coupons and When Coupons Are Often Used by Loyal Consumers Who May Purchase Anyway Declining Redemption Rates and High Costs of Couponing Misredemption and Fraud

Answer 3

Free Premiums Self-liquidating Premiums

Answer 4

an offer of an item of merchandise or service either free or at a low cost that is an extra incentive for customers.

Answer 5

Only Require Purchase of the Product

Answer 6

Require Consumer to Pay Some or All of the Cost of the Premium.

Answer 7

offer the consumer something for free

Answer 8

``` This program, as well as others such as United Airline’s Mileage Plus, have made airline miles a promotional currency as the airlines make more than $2.5 billion each year selling miles to other marketers who use them as promotional incentives. ```

Answer 9

a promotion where consumers compete for prizes or money on the basis of skills or ability. Winners are determined by judging entries or ascertaining which entry comes closest to some predetermined criteria.

Answer 10

a promotion where winners are determined purely by chance and cannot require a proof of purchase as a condition for entry. Winners are chosen by random selection from a pool of entries or generation of a number to match those held by game entrants.

Answer 11

brand equity. ``` The “Do You Know a Brawny Man?” promotion was very successful as sales volume during the promotional period grew 12.3%, which was 5 times more than the product category and Brawny’s market share increased from 10% to 11.5%. The promotion also received the Super Reggie Award from the Promotion Marketing Association as the best promotion of the year. ```

Answer 12

Brand Equity

Answer 13

sweepstakes, loyalty program

Answer 14

``` Bonus Packs Price-off Deals Refunds and Rebates Event Marketing Frequency/ Loyalty Programs ```

Answer 15

Obtain Distribution of New Products Maintain Trade Support for Existing Products Build Retail Inventories Encourage Retailers to Display Existing Brands

Answer 16

``` collateral pieces that are designed to provide them with information and encourage them to stock and promote their products. ``` ``` The tuna salad kit was named one of the top 10 new food products at the annual New Products Conference. Chicken of the Sea International does not do much media advertising but rather relies heavily on consumer and trade promotions to market its products. ```

Answer 17

``` Contests and Incentives Trade Allowances (Buying Allowances, Promotional Allowances, Slotting Allowances) Point-of-Purchase Displays Sales Training Programs Cooperative Advertising Trade Shows ```

Answer 18

Horizontal Cooperate Advertising Ingredient-Sponsored Coop Advertising Vertical Cooperative Advertising

Answer 19

...Ingredient-sponsored Cooperative Advertising. The “Intel Inside” campaign has been used since 1991. This campaign is part of a cooperative advertising program as personal computer companies are reimbursed 5 percent of what they pay for Intel chips with the money to be applied to ads they run carrying the “Intel Inside” logo.

Answer 20

Our Firm: Cut back promotions All Other Firms: Cut back promotions - Higher profits for all Our Firm: Maintain promotions All Other Firms: Cut back promotions - Market share goes to our firm Our Firm: Cut back promotions All Other Firms: Maintain promotions -Market share goes to all other firms Our Firm: Maintain promotions All Other Firms: Maintain promotions -Market share stays constant; profits stay low

Answer 21

...downward spiral whereby all competitors are | making extensive use of promotions.

Answer 22

1. Marketers becoming too dependent on using sales promotion to produce short-term or immediate increases in sales. 2. Investing in sales promotion at the expense of advertising and thus not building the long-term value of the brand franchise. 3. Brands losing their perceived value from the perspective of consumers when they are purchased because of a promotional offer.